Heartland Bank Direct - New Online Savings Account

Update 1/09/10: The rate has fallen from 1.31% to 1.11% APY. Refer to the bottom of the post for the rate history. Bonus is no longer available.

Heartland Bank is another bank getting into the online banking market with Heartland Bank Direct which offers a 5.05% APY online savings account. There's a minimum opening balance of $500, but it can drop below $500 after it's opened without any monthly fees.

The unique thing about this account is a bonus feature. You can earn $5 per $1,000 average monthly balance of the previous 6 months for a maximum bonus of $50. So for those who have $10K or less in deposits, the bonus would add about an extra 1% to the interest rate resulting in a rate close to 6% for the those 6 months. Update: I spoke with the head CSR today and he said the bonus is only available for new accounts. So a customer won't be eligible for another $50 bonus the following year unless he opens a new account. The CSR admitted the bonus page was misleading when it stated there's a limit of one bonus per account per calendar year.

Like the problem with FNBO Direct, the main problem with this account may be the slow ACH transfer speeds. Based on the Electronic Fund Transfer (ETF) documentation, free standard transfers can take 3 days. If you want one-day transfers, you have to pay $12 for the Premium ETFs (see disclosure).

When I called their toll-free number (877-444-5148), I was pleasantly surprised to have a customer service rep immediately answer my call. I was told that this account just started today. Unfortunately, being so new meant that the CSR wasn't able to answer a few of my questions, but she did offer to call me back with the answers tomorrow.

Questions the CSR wasn't sure about include whether there's a hard credit inquiry, number of linked accounts allowed and if interest would be lost if account is closed before the end of the statement period. I'll update this post once I receive answers to these. [Update:: Received info from CSR on these. See bottom of list.] Below is a summary of the main features of this online savings account based on the website documentation and from what I received from the CSR.

Do not block ACH transfers in or out initated by your outside bank account (CSR)

Linked account can be a savings or checking accounts (CSR)

Only one beneficiary can be listed per account, but you can open as many accounts as you like

Interest is deposited quarterly

No ATM card or paper checks

Electronic Statements only

No hard credit pull, just a soft pull (CSR)

Number of linked external accounts limited to 6

Interest would not be lost if account is closed before the end of the quarter

Heartland Bank Direct has the same problem as FNBO Direct in that there's no easy way to confirm its connection with the parent bank. You can view Heartland Bank's FDIC information here. The FDIC page only lists the URL for www.heartland-bank.com and there's no mention of heartlandbankdirect.com at heartland-bank.com. Please refer to this FNBO Direct post for more discussion on this issue. I did send heartland-bank.com a message from their contact form to confirm the new online bank. I don't suspect an issue, but I just want to be 100% sure.

Rate History:01/09/10: rate has fallen from 1.31% to 1.11% APY12/27/09: rate has fallen from 1.51% to 1.31% APY11/21/09: rate has fallen from 1.65% to 1.51% APY09/26/09: rate has fallen from 1.76% to 1.65% APY07/18/09: rate has fallen from 2.01% to 1.76% APY06/04/09: current savings account rate is 2.01% APY06/25/07: 5.05% APY

We are glad our product has received some interest (pardon the pun), but what anonymous posted is not actually correct. Heartland Bank Direct does not place any hold on depositor EFT funds. Customer can access their funds within the standard 2-3 day ACH period at no cost. Same-day ACH transfers are available with a service charge of $12.00.